big c, page-23

Just done some more work on the OZL production model.

I updated the model with Munda and C (I left SFR out). Based on the following assumptions

WACC 9.88%
USD Copper price 2011 $3.90; 2012 and 13 $3.30; 2014 $3.00 2015 & ff $2.50
Production tonnes, timing and C1 costs as per the above spreadsheet.
Cash has been discounted to take a/c divi and capital return for this year.
Capital cost of $1.6B AUD for C
Capital cost of $160m AUD for Munda
I have not factored in a long term dividend or the current share buyback

I get an NPV sp of $1.96

Now, if WACC is reduced to 6% (as OZL does not need to borrow), we get $3.20 / share

Now if WACC is 6% and LT Copper is $3, we get $3.82 / share.

As you can see, the model is very very sensitive to WACC, less sensitive to the copper price. This was a surprise to me.

HT1